Project’s Overview

This project presents code implementations for four widely-used earning management models. These models calculate discretionary accruals with varying assumptions. Four well-known models are:

  • 1. Jones (1991)
  • 2. Dechow, Sloan, and Sweeney (1995)
  • 3. Kasznik (1999)
  • 4. Kothari, Leone, and Wasley (2005)

In the first step, we calculate the model’s variables and then estimate the given models to find discretionary accruals, a proxy for earnings management. Further details of the project are given below:

  • We first create the total accruals from accounting variables.
  • We then construct variables X1-X4 of the models from accounting variables.
  • We use the Compustat variable names. However, they can be easily changed to match variable names from any other database.
  • We also create the two-digits SIC industry codes.
  • Then, we estimate cross-sectional regressions within each year and industry, excluding the focal firm.
  • Finally, we obtain the discretionary accruals.


Our Stata Code

We have developed user-friendly and robust Stata code for the steps outlined above. The code requires only a basic understanding of Stata and incorporates detailed comments on each line, facilitating both execution and comprehension.

Our standard practice is to share all relevant materials, including Stata do-files, raw data, final output files, and commented code. This approach aims to empower researchers to not only learn from the code but also adapt it for their specific purposes. We are further committed to providing support and addressing any questions that may arise during the application of these codes.



The code is available for $ $99 per model, plus a $50 for raw data processing (if you require our support to match the code to your data). For orders encompassing all four models, a 10% discount is available. Payment methods include:


Wise bank transfer (preferred due to low transaction costs).

Any major crypto currency

For further details, please contact us at:



Dechow, P. M., Sloan, R. G., & Sweeney, A. P. (1995). Detecting earnings management. Accounting review, 193-225.

Jones, J. J. (1991). Earnings management during import relief investigations. Journal of accounting research, 29(2), 193-228.

Kasznik, R. (1999). On the association between voluntary disclosure and earnings management. Journal of accounting research, 37(1), 57-81.

Kothari, S. P., Leone, A. J., & Wasley, C. E. (2005). Performance matched discretionary accrual measures. Journal of accounting and economics, 39(1), 163-197.

Project tags: Earning Management models,
Kothari, Leone, and Wasley (2005), Jones Model, FinTechprofessor,
Dechow, Sloan, and Sweeney (1995), Cross-sectional regression,